Celsius Network hires advisors to prepare for potential bankruptcy, says WSJ report

Celsius’ decisions after freezing transfers and withdrawals could impact the crypto sector as a whole

Celsius Network LLC has hired restructuring consultants from advisory firm Alvarez & Marsal to advise on a possible bankruptcy filing, the Wall Street Journal reported on Friday, citing people familiar with the matter.

The New Jersey-based cryptocurrency lending company froze withdrawals and transfers earlier this month due to “extreme” market conditions, in the latest sign of the financial market downturn hitting the cryptosphere.

A separate report from CoinDesk said on Friday that Wall Street bank Goldman Sachs was looking to raise $2 billion from investors to buy distressed assets from Celsius.

The proposed deal would allow investors to buy the assets at potentially big discounts if the cryptocurrency lender files for bankruptcy, according to the report, which cited two people familiar with the matter.

Celsius had $11.8 billion in assets as of last month. The company and Alvarez & Marsal did not immediately respond to Reuters’ requests for comment.

The market for digital assets has in recent months been roiled by extreme volatility as investors dump risky assets on fears that aggressive interest rate hikes to tame stubborn inflation could plunge the economy into recession.